The troubled Defence Department is facing big budget cutbacks as the Rudd Government attacks John Howard's spending binge on national security. In a move that will further strain relations with Defence, the Government is looking to wind back a promised 3 per cent increase in military spending as it seeks billions of dollars in savings.
This could strip about $1 billion from proposed Defence funding over the next few years - the global economic meltdown has forced Canberra to cut deep across all government agencies.
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Cutbacks in defence spending may not be as harmful to Australia's economy as some would have us believe.
ReplyDeleteSeveral $Billion of Australia's A$22 Billion defence budget drains offshore to foreign arms companies each year. If some of that leakage in Australia's wealth is reduced that may be a good thing.
Holland may be thinking the same thing - with the prospect of paying $10 bilions to the US/Lockheed for the F-35 upgraded or replacement F-16s may be a cheaper/better deal.
Pete